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Happy 4th of July

I would like to wish all of my readers and clients, family and friends a Happy 4th of July! I hope all of you have fun this weekend…. and then take Tuesday off to recover. 🙂

4th-of-July

RMO Services

RMO ServicesAre you licensed and have the ability to be a qualifier on another license to provide RMO services?

Do you hold the B, C10, C20, C28,  or C39 classification and are in the Los Angeles area?

If so, let me know. I have a attorney resource who specializes in contracts between clients and RMO’s. You would not have to pay the attorney and he would draw up the contract between the two parties.

So if you are a sole owner or RMO on less than three active corporate licenses and are interested in becoming an RMO on another license, please fill out my contact form below.

Remember, you cannot “rent out” your license and the cslb has stated they are looking for qualifiers who are not actively participating in the projects being done under the licenses they are qualifying.

CSLB Gives Fair Warning about Workers Compensation

CSLB Workers CompensationIn the Spring Newsletter, the CSLB gives fair warning about workers compensation.

Begin article…

CSLB Gives Fair Warning to Licensees Misusing Workers’ Comp Exemption

CSLB is contacting licensees who may be improperly claiming that they are exempt from purchasing workers’ compensation (WC) insurance because they have no employees. Contractors who are evading their responsibility to purchase WC coverage be forewarned – there are more moves coming to force compliance with the law.

For now, the educational letters are the first steps in a WC compliance strategy approved by the Board last December. The letter was drafted by CSLB in partnership with the state Employment Development Department (EDD) and Department of Industrial Relations (DIR) after a sampling of agency records and consumer complaints showed a high number of contractors are suspected of doing work that typically requires employees, yet are claiming the WC exemption.

Specifically, three sets of records shed light on what has been a persistent problem with WC fraud:

  • First, CSLB obtained a list of 25,000 contractors who had registered with DIR to perform public works projects. From a sampling of 200 of those licensees, 35 had a WC exemption on file – despite working on jobs that typically require employees.
  • Investigators examined building permits valued at $20,000 or more that were taken out in Los Angeles, Orange, and San Diego counties during a period last March. Of the 91 licensees who pulled permits on these large-scale projects, 34 had claimed the WC exemption.
  • Finally, CSLB looked at consumer complaints received in February, and identified that more than one-third involved WC-exempt contractors who may have been using employees.

Overall, more than 50 percent of all licensees have filed WC exemptions with CSLB, a rate suspected to be too high considering the nature of the contracting work done.

Contractors who falsely claim WC exemptions are taking a great risk to save a little money. WC violators not only face CSLB disciplinary action, but they expose themselves and their clients to liability if uninsured workers get hurt on the job.

Business and Professions Code section 7125 requires contractors to purchase a WC policy and submit proof to CSLB when an active license is issued, an inactive one reactivated, or at the time of renewal, unless the licensee does not employ anyone requited to have a WC policy or files a certification of self-insurance with CSLB. (All C-39 Roofing contractors, however, must carry WC insurance even if they work on their own.)

The letter reminds contractors with questionable WC exemptions about the need to follow the law if they have employees, and informs them about the stepped-up efforts to identify violators.

At its April 2016 meeting, the Board approved the following additional measures as part of an overall WC enforcement strategy:

  • Partner with investigators from district attorney offices and the state Division of Labor Standards to inspect active construction sites through a popular website used by contractors to find job leads and file permits.
  • Work with counties that receive DIR funding to battle WC fraud, and submit the names of serious violators to prosecutors that could result in the filing of criminal charges, rather than administrative action.
  • Expand CSLB’s stings and construction site sweeps to public works projects, partnering with EDD and DIR.

…end article

Don’t get caught without workers compensation. The fines can be very expensive. Having workers compensation now will save you $$ in the long run.

Critical Classifications

Critical ClassificationsThe CSLB has seen the error of their ways and has done away with the list of Critical Classifications!

Yep, you heard me! The Contractors State License Board, under the direction of the new Registrar Cindi Christenson (she’s moved to the top of my Christmas List!), has seen the light.

They have done away with what has been dubbed the “Villucci Rule” or “Villucci Disaster” and have gone back to processing license applications in a manner that is consistent with the law.

No longer will they be REQUIRING applicants of the A, B, C10, C16, C20, C36, C38, and C57 classifications to provide written documentation to PROVE their experience.

It’s been a long 3+ years, but the day has finally come. To put it in the words of the Registrar herself at a recent Board meeting… the previous way of processing applications was “probably improper.” One of the Board members wanted to know why application submittals have gone up, but the number of licenses issued has gone down.. uh… Rick Villucci is why!! I wonder how Rick is doing in his newly demoted position?!?! LOL

This means that ALL applications will be processed according to the contractors license law. This is to say that a minimum of 3% of ALL applications received will be pulled for a secondary review… as the law allows!

Bottom line… your A, B, C10, etc app will most likely get through the initial review process without issue (unless it isn’t formatted properly… [I can help with this] and is rejected) and sent straight to the exams. This is good new people!!

I give the CSLB a lot of grief (having been a former CSLB employee I feel I’ve earned the right), but in this instance… I totally applaud the Registrar!!

CSLB Employees of the Month

Today we are highlighting the outstanding efforts put forward by two CSLB employees who go above and beyond the call of stupidity.CSLB Employee of the Month

Employee #1 rejected an application because some of the experience provided went past the ten year limit. IF, the experience provided needed to include the time that went past the ten year limit, I could clearly see the need for the rejection.

But NO… the part of the experience submitted that did fall within the last ten years was sufficient to meet the CSLB’s 4 in 10 yr requirement. So why did this CSLB employee reject this application? Either this person is just flat out stupid, they are so completely anal that they can’t seem to get out of their own way, or they just prefer making more work for themselves. The jury is still out on that one.

Any way you slice it, total the amount of time the applicant provide that does fall within the ten year requirement and complete the processing of the application. Why put the applicant, who has been waiting many weeks for the CSLB to get through their ridiculous backlog only to have to wait more because the person reviewing his application is an imbecile.

Employee #2 rejected an LLC application because the LLC name (as filed with the Sect. of State) has the word “Construction” in it. Shocker, I know. A contractor wanting to use the word “Construction” in their business name! Call the cops… this person should be locked up! How dare they want to use the “C” word in their business name!

Here’s the catch… this company is applying for an A-Gen Engineering license. So the CSLB wants them to add Engineering to their business name. i.e. ABC Smith “Engineering” Construction LLC, instead of ABC Smith Construction LLC.

Am I the only one that finds this completely absurd?!?! Is the CSLB suggesting that A-Eng contractors (uh oh… another form of the “C” word) do not CONSTRUCT anything?!?!

And do they really think that any consumer with half a brain (which is more than some CSLB techs have) would be confused by this? They are making a lot of assumptions that are just not based in fact or reality.

Some things have changed for the good at the CSLB, but hiring/retaining stupid technicians is something that they’ll probably, most assuredly, never change.

CSLB Scrutinizing Workers Comp Exemptions

CSLB Scrutinizing Workers Comp ExemptionsThe Contractors State License Board (CSLB) is turning their attention to contractors who they believe should be carrying workers compensation.

In the newsletter article below, the CSLB discusses their plan to look into whether or not a licensee who submitted a workers comp exempt form should actually be carrying a workers comp policy.

Right off the top, any licensee who has employees must and should have workers comp. It’s the law. It benefits the contractor and his employee’s and their families. If you know me, you know that I’m always on the side of the law. If, or course, it just and not abusive.

Regarding the CSLB plan… if it walks like a duck, talks like a duck, it’s a governmental agency abusing its power and authority…. Yet again!

What they’re saying is that if you hold the A-Gen Eng., C8 Concrete, C10 Electrical, C20 HVAC, C36 Plumbing, or the C46 Solar classification, you could be part of their “random” checks. I wonder why they didn’t include the B-Gen??

As with everything else the CSLB does randomly, what exactly is their process for choosing their random sample? Throw darts at a board, pull license numbers out of a hat?

The law states: “Pursuant to Section 7065, the registrar shall conduct a comprehensive investigation of no less than 3 percent of applications filed under this section to ensure that the applicants met the experience requirements of this section.” This is the go to section for a lot of what the CSLB licensing department does. They throw this thing out like it was a coup-fourre card in a Mille Borne game.CSLB Coup Forre

They must look at an app and decide there is something about it and…..BAM!! 7065 COUP FORRE! Unless of course your application is one of the critical classifications, then the minimum 3% rule turns into a mandatory 100% rule!

 

Anyway… back to the random workers comp sampling of the classifications listed above. I personally know plumbers, electricians, HVAC guys, and some B-Gen Bldg. guys who work alone. The fact that the cslb has selected those classifications to focus their attention shows they really have no clue what actually takes place outside of their doors.

A one man shop is going to get a call, letter, or visit from a CSLB enforcement rep and he’s going to have to stop everything he’s doing to prove that he doesn’t have employees. Just what every small business wants to deal with… the heavy hand of State Government. No thank you!

Begin article

Workers’ Comp Exemptions Will Get Extra Scrutiny From CSLB

CSLB will be taking a much closer look at licensees who file exemptions from having to purchase workers’ compensation (WC) insurance, particularly those working in trades likely to need a partner or employees.

At its December meeting, the Board agreed to a strategy to bring more contractors into compliance with California law on WC insurance. More than 50 percent of all licensees have filed WC exemptions with CSLB, a rate suspected to be too high considering the nature of the contracting work done.

Business and Professions Code section 7125 requires contractors to purchase a WC policy and submit proof to CSLB when an active license is issued, an inactive one reactivated, or at the time of renewal, unless the licensee does not employ anyone subject to California WC or files a certificate of self-insurance with CSLB. (All C-39 Roofing contractors, however, must carry WC insurance even if they work on their own.)

To identify contractors who may be improperly claiming a WC exemption, and encourage them to purchase WC policies for employees, CSLB’s Enforcement division will:

  • Perform an analysis and reach out to contractors registered with the state Department of Industrial Relations who bid on public works projects. CSLB staff will perform random checks of those contractors, and send letters to those claiming WC exemptions about the need to provide insurance if they employ workers.
  • Review a sampling of the overall consumer complaints that CSLB receives for contractor WC compliance.
  • Conduct random checks of licensees in classifications most likely to need employee labor, but who hold WC exemptions. Staff will look at those with C-46 SolarC-36 PlumbingC-20 Warm-Air Heating, Ventilation and Air-Conditioning, C-10 ElectricalC-8 Concrete, and “A” General Engineering licensees who have declared they have no employees.
  • Review permit activity in partnering counties to determine if contractors pulling permits for large projects have WC insurance.
  • Coordinate with other state agencies to further identify WC violators. Representatives from CSLB, state Department of Insurance, and Division of Labor Standards will discuss ways to raise WC compliance among contractors.

Contractors who falsely claim WC exemptions are taking a great risk to save a little money. WC violators not only face CSLB disciplinary action, but they expose themselves and their clients to liability if uninsured workers get hurt on the job.

End of article

CSLB Changing the Rules

CSLB Changing the RulesThe CSLB is changing the rules again!

I spoke to an applicant today who’s application was voided by the CSLB.

After months of back and forth with the Contractors State License Board where they continued to ask for more and more documentation, they voided his application without offering the “options” letter. The “options” letter is something they’ve sent to countless other applicants. The letter gives the applicant the option of withdrawing the app, using someone else as a qualifier, or sending the app to a formal investigation. As you’ll see below, this applicant to not get the “options” letter. My question is why???

Did they change the rules again? And without any notification to anyone?

This particular applicant has an over abundance of experience, plus a college degree that should have given him at least up to two years of experience credit. With his experience and the overwhelming experience documentation he provided that covered more than 10 years (when only two years was required), why did they void his app?

Granted, there were some issues with the experience outline on the application (something I could have helped him avoid with my app review service), but the fact remains that he was not given the “options” letter. I firmly believe that if he’d been given the option of having a formal investigation he could have dealt with an investigator that actually has some construction experience… unlike those who work in the application unit of the CSLB who have none. The same people who were reviewing his application and made the determination to void his app.

We all know that the federal and state governments play by their own rules, but why can’t there be some consistency? How can anyone play the game when the rules are constantly changing?

Another issue I have with this particular application is that they granted an extended void date on January 8th. Did they grant a 30 days extension as is standard? No. If they had, the app would have been voided on February 8th. But they voided the app on January 26th! What the %*&# is going on here!!!

I gave the applicant some options, all of which we will pursue… bottom line… This kind of government abuse is unacceptable, and we as a society have to stand up and say ENOUGH IS ENOUGH!!

Application is void

  • 08/24/2015 – APPLICATION RECEIVED
  • 08/31/2015 – PRINTED ACKNLDGMNT LTTR TO APPLCNT
  • 09/10/2015 – APPLICATION RETURNED FOR CORRECTION
  • 09/10/2015 – WORK EXPERIENCE BLANK/PROBLEM
  • 09/10/2015 – CRITICAL CLASS DUTIES NOT SPECIFIC
  • 09/10/2015 – CERTIFIER RELATIONSHIP DISCREPANCY
  • 09/10/2015 – SPEC PROJ – EXPERIENCE VERIFICATION
  • 09/10/2015 – ADD’L SELF EMPLOYMNT INFO REQUESTED
  • 10/16/2015 – RETURNED APP RECEIVED BACK AT CSLB
  • 10/23/2015 – CORRECTIONS SENT TO BE SCANNED
  • 10/23/2015 – APPLICATION RETURNED FOR CORRECTION
  • 10/23/2015 – WORK EXPERIENCE BLANK/PROBLEM
  • 10/23/2015 – CERT DUTIES STILL NOT ACCEPTABLE
  • 10/23/2015 – SPEC PROJ – EXPERIENCE VERIFICATION
  • 10/23/2015 – ADD’L SELF EMPLOYMNT INFO REQUESTED
  • 12/09/2015 – RETURNED APP RECEIVED BACK AT CSLB
  • 12/24/2015 – CORRECTIONS SENT TO BE SCANNED
  • 12/24/2015 – APPLICATION RETURNED FOR CORRECTION
  • 12/24/2015 – WORK EXPERIENCE BLANK/PROBLEM
  • 12/24/2015 – CERT INCOMPLETE
  • 12/24/2015 – CRITICAL CLASS DUTIES NOT SPECIFIC
  • 12/24/2015 – EMAILED CERTS FOR ADDL CORRECTION.
  • 01/08/2016 – EXTENDED VOID DATE
  • 01/08/2016 – RETURNED APP RECEIVED BACK AT CSLB
  • 01/08/2016 – CORRECTIONS SENT TO BE SCANNED
  • 01/13/2016 – APP SENT TO SUPERVISOR FOR REVIEW
  • 01/25/2016 – ROUTED TO EXP ANALYST FOR REVIEW
  • 01/26/2016 – APPLICATION RETURNED TO PROGRM TECH
  • 01/26/2016 – DOCS INSUFF – EXPER NOT VERIFIED
  • 01/26/2016 – APP VOID – APP NOT PROCESSED
  • 01/26/2016 – APPLICATION IS VOID
  • 01/26/2016 – VOID LETTER SENT

Don’t put yourself in this position where you’re dealing with the CSLB changing the rules on you! Let me help you!!

Contractor RMOs for Hire

The CSLB released their Winter 2015-16 newsletter last week. One article discussed contractor RMOs for hire.CSLB Gestapo Tactics

Section 7068.1 of the Business and Professions code states: …”responsible for exercising that direct supervision and control of his or her employer’s or principal’s construction operations to secure compliance with this chapter and the rules and regulations of the board.” And Code 823(b) states: “For purposes of Section 7068.1 of the Code, “direct supervision and control” includes any one or any combination of the following activities: supervising construction, managing construction activities by making technical and administrative decisions, checking jobs for proper workmanship, or direct supervision on construction job sites.”

823 states “any one or any combination,” so if you are using an RMO that is not directly related to your business you need to ensure that he/she is following these guidelines.

I talk to people almost daily who need to use an RMO who is not directly related to their business. I tell them that the RMO must be involved in the construction activities that will be conducted under the license and the same rules and responsibilities apply as they do to the license they currently hold.

What I think is at issue here is the broad definition of “direct supervision and control.” Does the RMO need to be on the job site to manage or make technical and admin decisions? Not according to the law. Remember, it states “any one or any combination” is allowed, that suggests “direct supervision on construction job sites” does not have to be a mandatory choice.

With this ambiguity I’m left wondering what the CSLB gestapo task force is finding during their “investigations”, what are they citing these contractors with, and what are the criminal cases truly about?

I’m sure any attorney worth his hourly fee would be able to punch holes in any CSLB case that involved 7068.1 and 823. So if you are using an RMO or you are an RMO and you do not have a direct relationship with the business, I suggest you become as active as possible with the work being done. Log all phone calls, keep all emails, review contracts and sign them if possible, review photographs, and yes… even drop by the job site if you can (even though the law cited by the CSLB does not require it).

Last comment…. if this is such a big problem that the CSLB had to create a “task force”, why don’t they just amend or remove B&P Code 7068.1? Get rid of the 20% rule altogether? Or is it easier to create an unregulated task force, pry into the business activities of licensee’s, write citations and criminal cases, and collect 100’s of thousands of dollars? Well…. they even say it themselves… “yielded big dividends”!

Full CSLB article below

RMOs-for-Hire Better Know What They’re Getting Into

CSLB has zeroed in on licensees who rent their services as Responsible Managing Officers (RMOs) for companies over which they have little or no control. Due to the work of a special CSLB task force that targets suspected RMO abuses, those who act as little more than paid license qualifier for companies are being identified and disciplined for violating state contractor law.

Contractors who serve as qualifiers for a company’s construction operations must exercise direct control and supervision, and, by law, maintain at least a 20 percent ownership stake in each firm for which the person acts as a qualifier. Business and Professions Code (BPC) section 7068.1 authorizes CSLB to discipline the licensed entity when the qualifier is not actively involved in the construction activities of the license they are representing. In addition to administrative penalties, the individual falsely serving as a qualifier on the license can be charged with a misdemeanor and be sentenced to serve up to six months in jail, and required to pay a fine of up to $5,000, or both.

CSLB’s effort to uncover straw men RMOs has yielded big dividends. There have been a total of 304 complaints filed against those suspected of misusing their qualifier status (many still under investigation), 31 accusations filed to revoke or suspend a license, 12 citations issued for violations of contractor law, 11 criminal cases filed by local district attorney’s offices, and $215,000 in restitution ordered for wronged consumers.

CSLB has strong words of caution for those who would enter these arrangements: If you act as an RMO and do not have active and financial involvement in the construction and business operations, you risk CSLB administrative penalties against your license(s) as well as criminal prosecution, regardless of whether you’re aware of substandard work being performed by unqualified individuals.

The task force also is watching for exam waiver requests from applicants suspected of only seeking to rent their name for a fee. CSLB also will seek to revoke qualifier status previously granted to anyone whose actions demonstrate they do not have an ownership stake or are not active decision makers listed on a license.

A review of BPC section 7065 will provide further explanation of examination waiver laws.

End of article

Very last comment…. do I think the CSLB should be taking action against the extremely small percentage of contractor RMOs for hire? Yes.  Should they create an unregulated task force with no oversight to invade the businesses of California contractors? …. Not just no, but hell no!

Email from a Client

Contractors License Customer SatisfactionI received an email from a client who I have been helping since August of last year.

As with many applications there are twists and turns, and special circumstances. All of which need to be dealt with in a certain way and handled in a particular timeline. This client had been registered on a license as a Salesperson. I gave him advice on how he needed to explain his salesperson registration so that his license experience would be accepted.

He also had questions regarding workers comp, when he needed it, when he should buy it, etc. I am a licensed insurance broker and I answered his questions but suggested he contact my broker, Shilo, for more detail. She is an expert in workers comp for contractors and felt he would be best served by speaking with her.

Here is his email….

“I had spoke to Shilo right before I got your email, she answered every question I had and then some. Man you guys got this system down, I really wish more people could be so easy to work with. I’m a very honest person and I always expect people to treat me the same way but that rarely happens.

If someone told me how easy the test would be if I used your materials I wouldn’t believe them but it was easy and you’ve been spot on since the first time we spoke in August.

The technician at CSLB was very impressed with my application and he told me it saved him a lot of time because I disclosed the info about my HIS Lic and also sending in proof of employment with a B Lic for 4 years (sent in w-2’s/ last pay sub) and I used my brothers to sign for my experience. (Also send print out of criminal background even if it’s only traffic related, it cost $1)

I think the best thing was to be completely honest with them and send in as much info as I could without going overboard with it. The CSLB phone operator told me “do not send in your proof of employment or we will return your application” LOL !  I trusted you and sent it in anyway.

The only thing that happened to me was that owed $300 for a citation that I had inherited from my parents company and by the time the CSLB found the records (because it was from 2005) my technician went on vacation for 3 weeks so my Lic just sat there in his desk waiting for him to return!

I sent in my app on Sept 10th and they approved it over the phone and set up my test date on December 30th.

So basically without your advice I would have still been in application phase.

This has seriously made a huge impact on my family’s life & this is why I’ve been thankful for everything that you’ve done.

Next time you hear from me is when I hit my million$ mark lol. I do the best work on this side of the Mississippi so I’m sure you’ll hear about me again.

THANKS FROM THE SCOTT FAMILY 2016″

I shared this email with Shilo and this was her response….

“Phil,

Thank you for sharing that! It made my day.

I really appreciate working with you too. I have many guys call & tell me that you were amazing & if you recommended me that I had to be pretty awesome too. So the Kudos really go to you!”

Talk about making someone’s day! They both did!!

If you would like to discuss your specific license application circumstances, please feel free to contact me anytime.


(c) Can Stock Photo